It is a Wednesday morning, two days after the transaction closed. The business—a mid-market industrial services company with operations in six countries—was a division of a Nordic conglomerate until Monday. Today it is supposed to be a company. It is not.
The employees arrived at work to find their email addresses still carry the parent’s domain. The finance team cannot process invoices because the accounting system runs on the parent’s SAP instance and the new bank accounts are not yet connected. The CEO—who until forty-eight hours ago reported to a group executive vice president three levels above him—has never opened a board meeting, never presented to independent directors, and does not know the names of the law firm that advised on the acquisition. Two customers have already called to ask whether the change of ownership affects their contracts. The answer depends on clauses in agreements the management team has never read, because those contracts were managed by the parent’s legal department.
On a whiteboard in the CEO’s office, someone has written a list of ninety-three things that need to happen in the next thirty days. Nobody has prioritised them. Nobody has assigned owners. Nobody has worked out which ones depend on which.
This is not a crisis. This is what the first week of every carve-out looks like. After more than twenty of these transactions, across thirty-five jurisdictions and industries ranging from defence technology to metal recycling to brand logistics, we know that this moment is not chaotic because something went wrong. It is chaotic because a division has never had to be a company before, and the distance between those two things is larger than anyone on the outside—and most people on the inside—expects.
A carve-out is not the acquisition of a company. It is the construction of one. The business you acquire on Day One is incomplete by definition. Building it into a credible, independent enterprise is a programme of work that takes years and touches every function in the organisation.
What follows is a description of that programme. Not a framework or a methodology deck—there are enough of those—but a walkthrough of what actually happens, in what order, and why each phase matters. It is drawn from the composite experience of every transaction we have completed. The details are anonymised. The patterns are universal.
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Before Day One: What Most Buyers Miss
The carve-out begins long before the business changes hands. The period between binding offer and closing—the gap period, typically four to twelve weeks—is the most consequential planning window in the entire transaction. What happens in these weeks determines whether Day One is a controlled launch or a scramble.
During this period, the operations team must accomplish several things simultaneously. The IT separation programme must be scoped in detail: every system the business runs on must be inventoried, every shared infrastructure dependency mapped, every licence ownership established. In a typical carve-out, the IT documentation in the data room is incomplete. The divisional management team knows which systems they use; they rarely know how those systems connect to the rest of the group, what the licensing arrangements are, or what would be required to operate them independently. That knowledge sits with the parent’s group IT function—people who will not transfer with the business.
The finance infrastructure must be ready to function from the morning of close. Bank accounts opened. Payroll transferred to standalone systems. A chart of accounts designed. An interim reporting framework established that will produce the first management accounts within fifteen business days of the first month-end. These accounts will be imperfect. But they must exist, because without them the board has no financial picture and every other workstream operates blind.
The transitional services agreement—the contract under which the parent continues to provide IT, finance, HR, and other services to the business for a limited period after the sale—must be negotiated with precision. Every service, every duration, every service level, every exit mechanism must be defined before signing. A vaguely drafted TSA is not a minor contractual shortcoming. It is an eighteen-month operational dependency governed by a document that does not describe what either party has actually agreed to provide.
The gap period is when the most expensive mistakes are made—not through action, but through omission. A CFO appointment that is deferred until after close. A TSA technology schedule that does not reflect the actual IT separation timeline. A management team that arrives at Day One without having been briefed on the governance framework they are now operating under.
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The Five Separations
Building a standalone company from a corporate division is not a single project. It is five parallel programmes of work, each of which must be executed under time pressure, without interrupting the business’s trading operations, and without losing the people whose knowledge makes the business valuable. We call them the five separations.
TECHNOLOGY AND SYSTEMS
This is consistently the single most complex, most expensive, and highest-risk workstream. The business’s ERP system—the system that processes every sales order, every purchase order, every financial transaction—belongs to the parent. Its customer records, supplier data, production planning, and financial reporting all live in infrastructure the business no longer owns. Below the ERP, the dependencies multiply: group email and identity management, group network infrastructure, group software licences, group cybersecurity. Every one of these must be separated or replaced.
An ERP migration in a carve-out context is not a standard implementation. It is a migration under time pressure, from a system the business has used for years to a new system it has never operated, while the business continues to trade, process orders, and serve customers without interruption. The parallel run period—when both old and new systems operate simultaneously—is the highest-risk window. Data integrity issues, process gaps, and user adoption challenges are certainties that must be planned for. A complex IT separation runs eighteen to twenty-four months. It cannot be managed through quarterly board updates. It requires a permanent team member dedicated to IT separation governance across the entire duration.
Cost overruns in IT separation are the norm rather than the exception. The primary drivers are scope expansion—discovering post-close that the separation is more complex than the due diligence assessment identified—and timeline extension. Every month of TSA extension is additional cost. Every delay in ERP migration is a month of continued dependency on infrastructure the business does not control. This is why the IT assessment must begin at the binding offer stage, not after close, and must be conducted by someone with direct implementation experience—not delegated to a junior team member or an external consultant arriving without context.
FINANCE AND ADMINISTRATION
The division had no standalone finance function. If it had a CFO, that CFO reported to a group controller and had never managed independent treasury, banking relationships, statutory reporting, or an external audit. The numbers the division reported were produced by group finance, using cost allocations and intercompany pricing that were artefacts of the group structure—not reflections of the business’s actual economics. There was no standalone bank account, no working capital management independent of the group’s cash pooling, no cash flow forecasting of its own.
The finance function build is not a project that runs in the background. It is the foundation on which every other workstream depends. You cannot track the value creation plan’s financial impact if you cannot produce reliable management accounts. You cannot manage working capital if you do not have independent cash flow visibility. You cannot prepare for exit if you do not have audited standalone financials. The standard must be established from month one. Management accounts that do not meet the board’s requirements are returned before they reach it. Where the CFO inherited from the parent cannot fulfil the standalone role, that assessment must be made during due diligence and acted on before close—not six months later when the reporting has already suffered.
MANAGEMENT TEAM
The division’s leader reported to a group executive. They have never chaired a board meeting, never managed a relationship with external auditors or lenders, never set a strategy that was not subordinate to the group’s priorities. Key roles that an independent company requires—an experienced standalone CFO, an HR director, sometimes a dedicated commercial leader—simply did not exist, because the group provided those functions centrally.
Completing the management team is not a human resources exercise. It is a strategic assessment conducted with the rigour that the entire investment depends on. Each member of the senior team must be assessed against the specific demands of running a standalone company—not against their performance within the corporate group, where the context was fundamentally different. Where gaps exist, they must be filled with experienced operators who arrive with context on the operating model and the specific demands of a carve-out transition. These are not consultants who produce reports and leave. They are managers who take accountability for specific operational outcomes within the company’s own structure.
BRAND AND COMMERCIAL IDENTITY
When a business is carved out of a large corporate group, it frequently operates under the parent’s brand, uses the parent’s marketing infrastructure, and lacks the standalone commercial identity it will need as an independent company. This is not cosmetic. Brand dependency on the parent is a commercial risk that affects customer retention, sales team effectiveness, and ultimately exit value. A business that still carries its former parent’s name two years into independent ownership sends a signal to customers, employees, and potential acquirers that the separation is not complete.
The brand transition programme must launch from close: trademark applications, website migration, marketing asset audit, standalone brand development. Where the investment thesis includes commercial improvement—new market entry, channel development, customer proposition redesign—the marketing function build becomes a value creation initiative in its own right, not an administrative workstream.
GOVERNANCE
The fifth separation is the least visible and arguably the most important. As a division, the business operated under the group’s governance framework. Decisions on capital allocation, pricing, headcount, and strategy were made at the centre. The management team had whatever autonomy the group culture permitted—which, in most large corporates, is considerably less than an independent company requires.
Building standalone governance means establishing a functioning board with independent oversight, a structured reporting cadence, a clear set of performance expectations, and a governance framework that gives the management team the autonomy to run the business while maintaining the accountability the investment requires. The board pack—the standardised monthly reporting package that covers trading performance, key performance indicators, value creation progress, and the TSA exit programme—becomes the primary instrument through which governance operates. Getting this right in the first months sets the standard for the entire hold period.
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The First Hundred Days
Every acquisition follows a structured programme through the first hundred days of ownership. The programme is not optional. It is the mechanism through which five parallel separation workstreams are coordinated, prioritised, and driven to specific milestones under unified oversight. Without it, each workstream proceeds at its own pace, its own standard, and with its own definition of urgency—which, in a business that has never operated independently, is a guarantee of delays that compound.
DAYS 1–30: STABILISATION
The first thirty days are about operational continuity and establishing the governance infrastructure. TSA governance is activated within the first five business days: named managers on both sides, weekly service reviews scheduled and held, an issues log live from Day One. The discipline is immediate and deliberate. Service quality shortfalls accepted without formal escalation in the first week become precedents that make enforcement progressively more difficult for the next eighteen months.
The IT separation programme launches in parallel. The finance infrastructure—bank accounts, payroll, interim management accounts—must be functioning. The Day One issues log is assigned owners and deadlines. Some of these issues are trivial: the new email domain is not receiving external mail. Some are material: a key customer’s contract contains a change-of-control clause that requires consent the seller has not obtained. By day thirty, every open item must be either resolved or formally escalated.
DAYS 31–60: ASSESSMENT AND PROGRAMME LAUNCH
The first standalone management accounts are reviewed against the financial model. This is the first moment of truth: the numbers the business reported as a division—produced by group finance, using group cost allocations—will not match the numbers it produces as a standalone entity. The variances must be understood, explained, and incorporated into the financial model.
The value creation plan is designed during this period. Each initiative is assigned a named owner—not a department, not a workstream, a single individual who is accountable to the board. Each initiative must have a specific financial target linked to the model, a milestone schedule with dates, and a resource plan. Initiatives without all four of these essentials are aspirations, not commitments. The VCP design starts from the financial model, not from a list of ideas. The model tells you exactly how much improvement is required by exit. That aggregate target is the plan’s job.
A set of five to ten key performance indicators is agreed with the CEO and CFO—leading indicators that measure what the financial model depends on, not what is easiest to extract from existing reporting. Each VCP initiative must have at least one KPI that acts as its leading indicator. If a value creation initiative has no KPI measuring its progress, the board has no early warning signal when that initiative falls behind.
DAYS 61–100: STRUCTURAL INITIATIVE INITIATION
By day one hundred, every value creation initiative with year-one financial impact must be started, resourced, and reporting milestones to the board. The IT separation programme and TSA exit plan are presented as standing board items. The finance function build is on a milestone schedule. The management team assessment has been updated from the due diligence baseline. The brand transition programme has a timeline and a budget.
The business is not yet transformed—that work takes years. But the trajectory has been established, the governance is functioning, and the management team is operating against clear expectations with the support and accountability framework of independent ownership. The first hundred days establish the investment’s trajectory more durably than any subsequent period of equal length.
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From Stabilisation to Transformation
The first hundred days set the trajectory. The next two to three years are the execution. This is the period in which the business transforms from a recently separated division into a credible, independently operated company—and in which the value creation plan delivers the returns that justified the acquisition price.
Value creation in a carve-out operates across five levers. Revenue growth—pricing improvement, commercial effectiveness, new markets and channels—is typically the highest-value lever but takes twelve to twenty-four months to deliver measurable impact. Cost efficiency—rebuilding the standalone cost base, rebidding procurement contracts, removing the group overhead that no longer applies—delivers within six to eighteen months. Working capital release—addressing the receivables, payables, and inventory positions that were optimised for the group’s cash pooling rather than the standalone business’s needs—can deliver within six to twelve months. Capex optimisation—prioritising growth investment and reducing maintenance spend below legacy group levels—accumulates across the holding period. And exit positioning—building the management depth, governance credibility, and sector profile that commands a higher valuation multiple—requires deliberate work from year two onwards.
The value creation plan is not a one-time deliverable. It is a live document, formally refreshed at the annual strategy day and on completion of any major initiative. At each refresh, the gap between current performance and the exit target is recalculated. Completed initiatives are archived with their actual financial impact documented against the original model. At-risk initiatives are reassessed. If the gap has grown, new initiatives must be designed to close it—held to the same standard as the originals. VCP bloat is as dangerous as VCP gaps.
Status reporting must be binary and specific. Every initiative is classified as on track, at risk, delayed, or complete. No other labels are accepted. When an initiative is delayed, the board must see the financial consequence in exit value terms: the shortfall multiplied by the expected exit multiple gives the enterprise value at risk. This arithmetic transforms a vague status update into a number the board can act on.
The most effective reporting tool is the EBITDA bridge: a waterfall showing the movement from baseline at acquisition, through delivered initiatives, on-track initiatives, and at-risk initiatives (probability-weighted), to the exit target. The gap between the current risk-adjusted trajectory and the target must be visible and discussed at every board meeting. Never bury the gap.
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What Good Looks Like at Year Three
A business that has been well-built from a corporate division is, by year three, unrecognisable from the entity that was acquired. Not because the underlying operations have changed beyond recognition—the customers are often the same, the products are similar, the core team has been retained. But because the infrastructure, governance, and leadership that surround those operations have been constructed from scratch.
The IT systems are the company’s own. The ERP has been migrated, the TSA has been fully exited, the cybersecurity and data infrastructure are standalone. The finance function produces reliable management accounts, audited annual financials, and the cash flow visibility that allows the management team to manage working capital actively rather than reactively. The management team has been completed—a standalone CFO, often a commercial leader the division never had, sometimes an operations director or HR director—and has a track record of operating against clear performance expectations under independent governance.
The value creation plan has delivered measurable results: costs have been reduced because the group overhead is gone and the standalone cost base has been optimised. Revenue may have grown because the management team, for the first time, has pricing authority and a commercial strategy it owns. Working capital is more efficient. And the governance framework—the board, the reporting cadence, the performance expectations—gives any future acquirer, strategic or financial, the confidence that they are buying a company, not inheriting a separation project.
A buyer looking at this business three years after separation sees something fundamentally different from what existed on Day One. They see a company with audited standalone financials, a proven management team, technology it controls, a track record of growth under independent ownership, and a governance framework any acquirer can integrate with confidence. Not because the market moved. Because the business was built.
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Why This Demands a Permanent Capability
Everything described in this paper—the five separations, the hundred-day programme, the value creation execution, the governance build—must happen simultaneously, under time pressure, with a management team that has never done any of it before. This is the structural reality of every carve-out. It is also why most buyers struggle with them.
Generalist buyers encounter carve-out transactions once or twice per fund cycle. They engage external advisors for the systems separation, the finance build, the value creation planning. These advisors arrive without context on the buyer’s operating model, without relationships in the company, and frequently without prior carve-out experience of their own. They produce recommendations. Then they leave, often before the hardest phase of execution.
The carve-out demands something different: hands-on, continuous operational involvement for the first twelve to eighteen months. It demands people who have done this work before—who can distinguish between the problems that resolve themselves and the problems that compound if not addressed in the first week. It demands a permanent IT separation specialist who builds the systems inventory at due diligence and drives every service to TSA exit. It demands a finance partner who sets the management accounts standard from month one and returns substandard reporting before it reaches the board. It demands a brand and commercial lead who understands that brand dependency on the parent is a commercial risk, not an aesthetic question.
That capability cannot be rented transaction by transaction. It must be built, maintained, and refined across a portfolio of comparable transactions. The institutional knowledge that accumulates—the playbooks for IT separation, the templates for the hundred-day plan, the network of interim managers who arrive with context rather than spending their first weeks acquiring it—is the compound advantage that produces faster separations, lower transition costs, and stronger standalone businesses.
This is the work. It is specific, it is demanding, and it is the only reliable way to create value in a carve-out. Not through financial structuring. Not through market timing. Through building companies.
MIMIR GLOBAL INVESTMENT GROUP
The Carve-Out Growth Investor
Kungsgatan 7, SE-111 43, Stockholm, Sweden